The Investors & Exporters’ (I&E) FX Window reported a trade increase by 65.81 percent for the week ended February 22, 2019.
The total value of trades recorded in the I&E Window for the review week closed at $1.94 billion (N701.94bn), from $1.17 billion (N423.34bn) reported in the previous week ending February 15, 2019, according to figures released by FMDQ OTC, a securities trading platform.
The I&E Window was established by the Central Bank of Nigeria (CBN) in April 2017 to boost liquidity in the foreign exchange market and ensure timely execution and settlement for eligible transactions.
Trade on the window for the week ended February 22, 2019 brings the year-to-date (YTD) value of trades at the window to $8.69 billion (N3.14trn).
A review of trading activities in the Spot FX market amongst banks for the week ended February 22, 2019 also revealed an increase of 103.46 percent, as a total turnover of $559.42 million (average daily turnover of $111.88 million) was recorded, from $274.95 million (average daily turnover of $54.99 million) reported the week ended February 15, 2019.
The trading activities in the Spot FX market between the DMBs and their clients stood at $2,196.16 million (average daily turnover of $439.23 million) for the review period, representing a decrease of 20.64 percent when compared to the $2,767.44 million (average daily turnover of $553.49 million) recorded the week ended February 15, 2019.
A further analysis of the data by FDMQ revealed that in the OTC FX Futures market, $675.78 million worth of OTC FX Futures contracts were traded in the 46 deals, compared to a total of $512.25 million traded in 37 deals for the week ended February 22, 2019.
Meanwhile, Nigeria’s apex bank, in its periodic supply of US dollars in the FX market aimed at stabilising the naira, offered a total of $100.00 million to the Secondary Market Intervention Sales (SMIS) Wholesale window on February 26, 2019.
The CBN also sold $55.00 million each to both the Small and Medium-scale Enterprises (SMEs) and the Retail (Invisibles) segment. The bank released the results for its auction of Chinese Renminbi and (US) dollar under the Bilateral Currency Swap Agreement (BCSA) and SMIS-Retail held on February 22, 2019, selling ¥46.30 million and $268.40 million at both sessions, respectively.
The bank’s effort to maintain the country’s currency value may have rubbed off on the I&E Window considering that the naira appreciated at the Window in the week ended March 1, 2019, gaining N0.46 to close at $/N361.03 compared to $/N361.49 recorded the previous week, resulting in a spread of $/N3.03 between the BDC market rate and I&E FX Window rate.
The spread between the BDC market rate and the CBN official exchange rate fell by N1.05 to close at $/N53.15, indicating a decrease of 1.94 percent from the $/N54.20 recorded in the previous week.
Also, the 32nd OTC FX Futures contract, with contract amount of $563.55 million, matured and settled on Wednesday, February 27, 2019. The CBN introduced a new contract, NGUS FEB 26 2020 for $1.00 billion at $/N63.40, to replace the matured contract and refreshed its quotes on the existing 1- to 11-month contract.
Endurance Okafor
